The Impact of New Marine Emissions Regulations on the LNG Market

Changes to the IMO emissions standards will see the global sulphur limit in marine fuel reduced from 3.5% to 0.5% from 2020.

Marine fuel is a huge energy market which is currently dominated by oil products. However, tighter environmental regulations, particularly MARPOL Annex VI, are driving changes in fuel requirements, especially with regards to sulphur emissions, both in the Emission Control Areas (ECAs) around the coasts of North-West Europe and North America, but also globally, particularly as the 0.5% sulphur limit applies globally from January 2020 . LNG has opportunities in this sector as a low-sulphur fuel, although it also faces strong competition from low-sulphur oil products, sulphur scrubbing technology, and potentially from electric vessels. Currently there are known to be around 139 merchant vessels using LNG as a fuel, with a similar number on order. Whilst LNG-fuelled shipping has been slow to take off, it is now growing rapidly, particularly as supply infrastructure coverage has improved significantly in recent years. LNG is likely to become a fuel of choice for newbuilds in many sectors, whilst there may also be some LNG conversions.

Blue Skies and Natural Gas in China

2017 was a key and challenging year for the Chinese gas sector. All indicators point to an acceleration of natural gas penetration in the energy mix and an intensification of gas market reforms to facilitate this expansion.

Boosted by the recovery of Chinese economic growth, the acceleration of coal-to-gas switching policies, and the rebound in the competitiveness of natural gas relative to competing fuels, China’s natural gas consumption reached a record high level. According to the National Development and Reform Commission (NDRC), natural gas consumption rose by 15.3% to 237.3 bcm in 2017. China was the world’s fastest growing gas market: the country alone accounted for a quarter of global growth in gas consumption.

Ten major trends in the European gas market (Part 2)

The EU gas and energy sector is in the midst of a profound transformation driven by decarbonisation, digitalisation and decentralisation. The latest report by Cedigaz analyses in ten key points the evolution of the gas sector and includes forward looking views on new trends in EU gas markets.

6. Role of gas in the energy transition in the medium term: Natural gas is expected to be a key pillar of the EU energy transition. As the cleanest of all fossil fuels, it allows a quick reduction of the power sector’s emissions thanks to coal-to-gas switching. Moreover, thanks to its flexibility, natural gas is an ideal partner to renewables. Gas-fired power plants are well suited to follow rapid swings in power supply of variable renewables. In the transport sector, the cleanliness of natural gas is a key advantage for improving air quality, a major health and economic issue. In maritime transport, new regulations to reduce sulphur emissions from shipping play a key role in the development of LNG as a marine fuel. Natural gas, if it cannot decarbonise the heating sector, can make an effective contribution to reducing emissions from the sector and, in the long term, can be replaced by renewable gas.

UK power supply & CO2 emissions from power plants